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24 Oct 2020

Could your prepaid travel card be about to start charging you for not going abroad?

Find out how much you could stand to lose for not using or cancelling your card

The coronavirus pandemic has put travel plans on hold for millions of people this year, which could prove costly for those with holiday money sitting idle on prepaid travel cards.

You might think the cash you've loaded onto your prepaid travel card will still be there when you next manage to go abroad. But many card providers charge inactivity or dormancy fees for not using your card for a certain period of time. There may also be cancellation fees that can make it tricky to avoid losing out.

Here, Which? reveals which prepaid travel cards attract fees, which providers are being more lenient because of coronavirus, plus what you should do if you're likely to start getting charged soon.

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Will my prepaid travel card start charging me?

We asked prepaid travel card providers about their inactivity and cancellation fees and whether there's any way for customers to avoid these charges.

We've outlined the fees in the table below. You can use the search bar to find your provider.

As the table shows, only a few providers had changed their terms due to the coronavirus pandemic.

Those with prepaid travel cards could end up paying up to £3 per month and in many cases, these dormancy charges will kick in after the cards haven't been used for 12 months. But if you want to get out and cancel your card, several providers will charge up to £10.

The good news is that there are several ways to prevent your card from being registered as 'dormant' or inactive - many of which include spending or withdrawing cash in the UK, which means you shouldn't be penalised for not being able to go abroad.

If you're not sure if or when your card will charge you a dormancy or inactivity fee, you should check the card's terms and conditions and, if it's still not clear, contact your provider.

What are prepaid travel cards?

You can load cash onto a prepaid travel card before you go abroad, meaning you can avoid foreign transaction fees and the need to carry a lot of cash.

There are three main types of prepaid travel cards:

  • Single-currency prepaid cards: these are restricted to one currency, such as euros or dollars, and you can lock in the exchange rate on the day you load up your cash, which is great if rates fall afterwards.
  • Multi-currency prepaid cards: you can load several currencies onto the same card, which are usually stored in different 'wallets'. You can lock in rates when you load up your cash, or choose to store some money in pounds, which can be converted later.
  • Sterling prepaid cards: these allow you to load up your money in pounds, to be spent in many different currencies. The downside is that whenever you spend or withdraw cash, you'll get whatever exchange rate is in place on the day, making it harder to budget.

Find out more:prepaid travel cards explained

Alternatives to prepaid travel cards

While prepaid travel cards are a good option for taking cash abroad, the downside is you won't be able to borrow any money if you run out of cash or tap into the money in your main current account.

As an alternative, you could weigh up the best credit cards for overseas spending or read our guide on the best debit cards to use abroad.